B. FOR EUROPEAN GROWTH
The European Union was established as a single market and it should not overlook this foundation. Scenario 4 in the European Commissions White Paper calls for better targeting of its economic intervention by concentrating on aid for innovation, consumer protection and the deepening of the Economic and Monetary Union. This approach also received the support of your rapporteurs provided that it clarified.
1. Aid for innovation and investment
The Commission is committed to excellence in research and investment in new European-wide projects, as with decarbonisation, digitisation, cooperation on space-related matters and the completion of regional energy platforms. The monitoring group for the withdrawal of the United Kingdom and the rebuilding of the European Union retained similar objectives. It remains to be seen to what degree European Union action should represent real added value and not replace action by the Member States.
The case relating to energy is most eloquent. The Senate has adopted several resolutions in recent months recalling the division of powers between the European Union and the Member States 22 ( * ) . The creation of regional energy platforms, as called for by the Commission, in the first place must serve to implement a real energy Union. This should provide answers to the shortcomings identified in the European electricity system and enable regulations and markets, which are still fragmented, to be unified, generating significant economic, social and environmental costs. However, it remains true that the European Commission must act in respect of the principle of subsidiarity, and, in this case, the right of the member states, guaranteed by the European treaties, to determine the overall structure of the energy supply. It is not simply a matter of giving any power of control to the Commission, but encouraging the member states to better coordinate their initiatives.
As regards decarbonisation, European added value is even more important. The Union must retain its leading role in the fight against climate change, by encouraging the development of certain technologies of the future and to set a course for an accelerated transition towards a more resilient and lower-carbon world. It must therefore improve its coordination efforts in sectors with future potential by encouraging the development of truly competitive industrial chains. At the same time, all proactive policy moving towards a competitive energy transition should take into consideration global issues of economic and social balances. This also applies to regulated electricity tariffs for residential customers, and to the impact of European measures in favour of the circular economy for local authorities.
In regard to the digitisation of the economy, action by the European Union is vital. It must move in three directions: strengthening the European single market by improving access to digital products and services across Europe for consumers and businesses; creating a conducive environment and a level playing field for the development of innovative digital networks and services and, finally, maximising the potential for growth in the digital economy. At the same time, the Union must act as a power by affirming its sovereignty in the digital world. It must both better protect its companies and citizens, and, be more present on the international scene.
More broadly, the action of the European Union appears both justified and critical if it can serve to enhance the competitiveness of European companies and facilitate investment. It should support change and not curb it, while allowing plenty of scope for national strategies.
2. Competition and control of state aids
Scenario 4 provides that state aid control is delegated more to national authorities. Such an opinion may be relevant. However, vigilance is required in terms of the competition experience gained. Decentralisation concerning competition policy was not accompanied by joint reflection on its ambitions and a revision of its criteria, and in particular the concept of the relevant market. The competition policy must be in the interests of the European industrial policy and facilitate the emergence of European champions.
Under these conditions, a decentralisation of state aid monitoring results in the redefinition of assessment criteria in the European Union:
international competition should also be taken into account in the prior analysis of possible sanctions;
state aid should also be considered as a lever for private investment in sectors with strong growth potential;
state aid may be authorised if it directly contributes to European Union industrial objectives.
3. The enlargement of the Economic and Monetary Union
Scenario 4 states that the European Union will continue to adopt measures to consolidate the eurozone and to ensure the stability of the single currency. Your rapporteurs share this ambition. A clear division of tasks which initially drove the Economic and Monetary Union today appears outdated. In effect, the Central European Bank, independent and in charge of the monetary policy, should stabilise the zone in the event of an economic shock affecting all member states in the same manner. In the event of a local crisis (asymmetric shock), the States are free to act through a budgetary policy, within the limits of the Stability and Growth Pact (public deficit below 3% of the GDP and debt below 60% of GDP). Member states should therefore ensure, via countercyclical policies, that they develop their emergency preparedness. The 2008 economic and financial crisis showed that this condition had not been fully respected by the Member States. Since then, the Union has given itself new ways oriented towards a form of fiscal federalism and measures to respond to shocks within some Member States (European Financial Stability Facility and European Stability Mechanism). However, on this issue it appears to be waiting for new efforts as illustrated by the many reports and roadmaps drawn up by European institutions since 2015 23 ( * ) .
Firstly, the boundaries of the expected deepening of the governance of the eurozone need to be established . This cannot be limited to the application of the Community method on monetary matters. Instead, it consists of achieving real political leadership by strengthening the role of the Eurogroup or by systemising the eurozone summits. Clearly, these provisions go hand in hand with closer involvement of national parliaments.
Beyond governance structures, it is necessary to provide the Economic and Monetary Union with the adequate arrangements to deal with shocks. As such, the proposal to create a European Monetary Fund, put forward by the Commission last December, must be strengthened 24 ( * ) . In particular, questions must be addressed on the banking licence which may be granted or a capacity, using the Fund, to issue additional debt to those Member Sates facing difficulties. This development must be combined with the consolidation of budgetary surveillance at European level.
4. Moving towards social and fiscal convergence
As noted by the monitoring group in its report on the rebuilding of the European Union, the strengthening of the European Monetary Union must go hand in hand with the creation of a real social and fiscal convergence code. It is necessary to establish, over time, an incentive mechanism for the convergence of the rules on labour markets and social systems to effectively strengthen the social dimension of the eurozone.
The approach concerning social matters must also be extended in the field of taxation by means of the ongoing reflection on the Common Consolidated Corporate Tax Base (CCCTB) to enhance convergence of the economies of the zone, and combat tax competition between the States. In particular, a timetable should be put in place to reconcile company taxation. Any convergence in the matter must not be done to the detriment of the competitiveness of French companies or national tax revenues. The Franco-German partnership may constitute the framework for accelerating convergence by harmonising their VAT rates, taxes on capital, and by putting in place a single community rate of corporation tax. This convergence code may be extended to investment, in particular in research and development.
Under these conditions, your rapporteurs have some reservations on the will of the Commission, within the framework of Scenario 4 on being less involved in the different strands of social policy and employment and maintaining variable levels of taxation on all sides of the European Union. Concerning social matters, the desire of the Commission may seem inconsistent with the proclamation on the European Pillar on Social Rights by the Council, European Parliament and the Commission on 17 November 2017, and the announcement by the executive of the forthcoming implementation of a European Labour Authority and the creation of a European social security number. This set of measures is envisaged to strive towards the kind of social harmonisation expected by our citizens, and to strengthen the idea of a Europe that protects.
The same reasoning applies to tax matters. The aim is to help the Union address the competition problems within it. The question of a move to qualified majority voting in this area is also worth raising.
* 22 European resolution regarding reasoned opinion N° 125 (2015-2016) of 11 April 2016, European resolution regarding reasoned opinion N° 108 (2016-2017) of 5 April, European resolution regarding reasoned opinion N° 109 (2016-2017) of 16 May 2017, European resolution N° 129 (2016-2017) of 8 September 2017, European resolution regarding reasoned opinion N° 43 (2017-2018) of 10 January 2018.
* 23 Completing Europes Economic and Monetary Unionreport by Presidents of the European Council, the Commission, the European Parliament, the Central European Bank and the Eurogroup, 22 June 2015.
* 24 Proposal for a regulation on the establishment of the European Monetary Fund (COM (2017) 827 final).